Business alliances often begin simply, sparked by a meeting at anetworking event or a referral from a trusted associate.

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But getting together -- and then staying together -- in asuccessful business alliance in the life/health/benefitsmarketplace doesn't happen by accident. But just how do businessalliances work -- and not work?

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A panel discussion at an industry event (the Inter-CompanyMarketing Group 2009 annual meeting) highlighted key elements thatcan turn potential business partners into effective businesspartners:

  • There is a similarity between marriage and a business alliance:Both require dating, mating and staying in love. So observed TerryYoung, vice president-group business development, at Ameritas LifeInsurance Corp., Lincoln, Neb., which offers group dental andvision products.
  • When business partners are seeking prospects for theiralliance, who's going to do what? That's a key question that has tobe asked and answered up front, noted Steve Course, vicepresident-marketing, BEST Life & Health Insurance Co., whichprovides group dental, medical, life, and disability products.
  • Make a plan to learn right away once an alliance starts, notedBruce Maginnis, group benefits consultant, Gilsbar Inc., athird-party administrator. "We find there are all kinds of thingswe didn't know about and the business partner didn't know about"once the alliance begins to do business. Maginnis said:"Relationships are defined when something goes wrong. You want apartner that will work things out together. It's not 'my problem.'It's not 'your problem.' It's 'our problem.'"
  • The premiums generated by the life, health, or benefits productmust be sufficient to 1) provide the level of client service thatcan keep the client base, and 2) generate the returns that can keepthe business partners interested, noted Maginnis.
  • Tom Mayer of Direct Benefits Inc., a managing general agency,noted that carriers need to understand how "expensive" distributionis if they want to succeed in joint ventures. "If you have a goodpartnership going, reinvest in it. Some carriers don't getthat."
  • Try to understand how the business partner's operations andpeople work, recommended Course. "You've got to understand eachother's cultures. Knowing what the two parties' cultures are, andhow they fit, determines whether deal works."

Those are a few thoughts from professionals involved ineffective strategic alliances. We'll be back with more insights ina future blog post.

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